The University of Malta is facing a deepening financial crisis, posting a €11.17 million deficit in its latest audited accounts, with independent auditors warning there is “material uncertainty” over its ability to continue operating if its financial position does not improve.According to its unpublished 2023 financial report, current liabilities exceed assets by nearly €19 million, painting what auditors described as a precarious picture as reported by Times of Malta.The figures mark a sharp deterioration compared to previous years. The university recorded a €5.1 million deficit in 2022 and just €620,000 the year before. In 2021, it had even posted an accumulated surplus of €2.3 million.While total income in 2023 increased slightly by €1.8 million, expenditure surged by €8.7 million, largely driven by a “marked decrease” in the government’s budgetary allocation halfway through the year and a new collective agreement for academic staff, alongside COLA adjustments, which pushed payroll costs up by €4.4 million.Although the university increased revenue from student fees, particularly by attracting more non-EU students, the rise in income was not enough to offset mounting expenses.The financial strain is also affecting major capital projects, including a new sports complex on the main campus, the refurbishment of the Junior College and the completion of the Gozo Campus. The report states these projects “have fallen behind” schedule due to lack of funding.Independent auditors from RSM Malta escalated their concerns in the 2023 report, saying prevailing conditions “indicate the existence of a material uncertainty that may cast significant doubt” on the university’s ability to continue as a going concern.The university and government have frequently clashed over funding in recent years. In 2022, Rector Alfred Vella had warned that a planned €1.1 million budget cut would freeze recruitment, though official figures later showed the cuts did not materialise.Speaking at a Times of Malta event in late 2024, Finance Minister Clyde Caruana criticised the institution’s financial management, insisting it must “pull up their socks”, “roll up their sleeves” and start generating its own income.Under the Education Act, the University of Malta operates as an autonomous body rather than a standard government department. While it receives a government subvention for core operations, this is often insufficient to cover its expanding payroll and capital investment plans.Despite the deficit, the institution continues to grow. Student enrolment has reached around 12,500, while 2,267 people are employed, including more than 100 research support officers recruited temporarily for externally funded projects.Meanwhile, the academics’ union UMASA is negotiating a new pay package with the government and university, a deal that could further increase payroll costs. Reports last month indicated the union had initially demanded a yearly pay packet of €130,000 for full professors.The financial outlook now raises serious questions about how the university will balance its autonomy, expansion plans and rising costs in the years ahead.•